Savin Combines Electricity Payments with Automated Savings
Energy provider EAM has launched Germany's first embedded investment product in the electricity sector, enabling customers to combine their monthly electricity payments with automated savings. The product launched under a separate brand called Savin.
How Traditional Electricity Billing Works
Typically, when consumers in Germany sign up for a new electricity provider, they provide an estimate of their expected electricity usage. Based on this, the provider calculates a monthly payment. After twelve months, the provider compares expected usage with actual consumption. Consumers either receive a refund if they've overpaid or face an additional payment if they've underpaid.
Savin's Embedded Investment Approach
With Savin, consumers still determine their monthly electricity payment based on expected usage, but they can add a buffer amount on top. This buffer is invested according to the consumer's risk preference. After twelve months, when the provider reconciles expected versus actual usage, the buffer amount covers any additional payment required, up to the amount available in the buffer. If the additional payment exceeds the buffer, consumers would need to pay the difference. If consumers are due a refund from the energy provider, it flows directly into their investment account.
EAM partnered with German investment company Evergreen to power this embedded investment product. I interviewed Evergreen's founder Iven Kurz for our podcast episode 3 in July 2024, where we discussed exactly this use case.
Will Embedded Investment in Energy Succeed?
The success of such embedded investment products will depend heavily on consumer benefits and the actual customer journey. The product offers clear advantages, particularly for people who struggle with unexpected additional payments at year-end. Additionally, energy providers can reach entirely different customer segments, especially those who might not have an investment or even a savings account. If the product succeeds, it could help introduce savings and investment habits to consumers who otherwise wouldn't engage with such financial products.
